I am supporting Albany Measure F — the measure to add a half-cent to sales tax in the city. This money will come directly to Albany and is needed in this time of reduced revenue.

I generally dislike sales taxes because they are regressive. A sales tax is a tax on everything someone purchases (with a few important exceptions — primarily food and services). People at the middle and lower end of the economic scale have to use a lot more of their income for taxed purchases than those at the higher end. This means more of their income is taxed by a sales tax, so they are effectively paying a higher tax rate than those who are able to simply save or invest more of their money.

Another reason to be concerned about sales taxes is that much higher tax rates in one region can drive customers to other regions.

But the budget problems facing Albany are very real. The city has so far weathered this storm fairly well with some cut backs, and with a lot of frozen staff positions (empty positions left empty, or positions not filled after someone has left). But these types of cuts have gone about as far as they can — it’s getting to the point that more drastic measures would be necessary, and I believe that without this sales tax more of the citizens of Albany would begin feeling the reduced city services.

So the sales tax. As an aside, I don’t think I need to more than mention how things might be different if the proposals for an expanded Safeway and the UC development on San Pablo had gone forward more quickly.

One concern I had with the sales tax was that it could harm Albany businesses — making them less competitive with businesses in neighboring communities. But I spoke to several business owners, and they actually weren’t very concerned about this. Many communities added a tax like this a few years ago when a similar statewide tax expired (so the total sales tax remained the same, but the money went to the city rather than the state). El Cerrito, for instance, already has the 9.25% sales tax that this will create in Albany. The business owners I spoke to don’t anticipate a significant impact on business due to the increased tax. I would also say that I personally don’t generally think about sales tax rates when making choices about where to do business. I would also add that another proposal for generating revenue, parking meters, would almost certainly do more to harm businesses here than would a small sales tax increase.

Another concern was that the city should earmark at least a portion of the revenue from this tax to invest in economic development in the city — so that maybe such a tax increases wouldn’t be necessary in the future. But as important as support for economic development is, it is only one of many competing priorities right now. I definitely support the city devoting more resources to economic development, but the people making the budget decisions need as much flexibility as possible to direct this sort of revenue to where it is most needed - especially in a time of crisis. We need look no further than Sacramento to see how tying the hands of the people making budget decisions makes a complicated, difficult process that much more complicated, difficult, and sometimes unworkable.

Finally, another concern was that this tax would impact the pocketbooks of the people of Albany, and I don’t think there is any way to get around this. But I also realize that a significant percentage of taxed purchases in Albany are made by people from outside the city limits. This means that while the citizens of Albany will be paying a bit more for purchases they make in Albany, they will also be benefiting from the purchases people from outside the city make here. So it’s not ideal — and I wish it weren’t necessary — but if we need to have a tax, one that benefits us more than we pay into it is about as good a deal as we’re going to get.